In short: Recent geopolitical developments have brought a slight reprieve to mortgage rates, though they remain well above February’s lows. Despite higher rates having eaten into some of the affordability gains from earlier in the year, March was one of the busiest months for newly pending home sales since late 2022. Near-term demand may be sustained by a wave of buyers operating on the finite timeline of rate locks secured when rates were near 6%.

Mortgage rates ease from recent highs amid ceasefire announcement

Oil prices and bond yields fell on the news of a ceasefire. On net, average rates are slightly lower than a week ago, but still up from the lows in late February, when the 30-year fixed mortgage rate briefly fell below the important psychological threshold of 6%. 

What’s the impact on housing? 

Home shoppers have been navigating uncertainty in some form since the start of the pandemic six years ago, and the March sales figures indicate they took this latest blow on the chin pretty well. Zillow’s March Market Report showed that the housing market accelerated despite the mortgage rate spike that eroded a third of this year’s affordability gains. Notably, demand held firm, with average daily page views per for-sale listing on Zillow 32% higher than last March. 

One potential explanation is timing. Some buyers presumably began their search during the brief window of sub-6% rates in late February. Even if they didn’t lock at the absolute bottom, many may have secured rates meaningfully below today’s mid-6% levels. For these shoppers, the clock is now ticking: rate locks typically last 30 to 60 days, creating a finite window to find a home and make an offer.

That dynamic could help sustain near-term demand, even if affordability remains stretched. But it also underscores how sensitive today’s housing market is to small shifts in mortgage rates, and how quickly momentum can build or fade depending on where rates move next.